Press Release: Panel Success for Phoenix Legal Services

Phoenix Legal Services is featured on Business Live and in Western Mail Business Wales today as we celebrate our success in winning a place on the Crown Commercial Services panel for legal costs services. Here is what Business Live had to say about us:

‘A Cardiff law firm is expected to double in size after securing panel status with Crown Commercial Service.

Phoenix Legal Services believes the contract has a potential value of up to £4m and increase the staffing levels to 34 in the next two years.

Phoenix was created in 2003 by Stephen Averill and is the only Welsh company to win a place on this national framework, achieving panel status following a tendering process. The firm offers costs management and recovery.

CCS is the largest public procurement organisation in the UK, playing a role in helping the UK public and third sectors save money when buying common goods and services – everything from locum doctors and laptops to police cars and electricity.

CCS is free to use for public and third sector organisations, and in 2017/18 CCS helped 17,000 buyers save £601m of public money using CCS commercial agreements.
Mr Averill said: “When I set up Phoenix I wanted to stand out from the competition, with an ethos of nurturing and supporting the individuals in my team and making them feel valued.

“It’s testament to their skills and commitment that we have achieved this prestigious panel status, a game changer for us, and we can now all look forward to significant future expansion with real confidence.”’

You can see the article here

No revision of budget absent significant developments

Seekings & Ors v Moores & Ors [2019] EWHC 1476 (Comm)

The Defendant applied to increase its budget by £130,000 citing ‘significant developments’ in the action.

Budgets were agreed ahead of the CCMC, at which time the Claimant had already served Requests for Further Information (“RFIs”). The initial replies to the RFIs were not deemed satisfactory and subsequently became the subject of interim applications brought by the Claimant.

The Defendant’s application was made on the basis that (i) significant costs had been incurred in addressing the RFIs and (ii) that a greater than anticipated number of documents had been produced.

The Judge found no significant development in the proceedings. The RFIs preceded, and were therefore anticipated within, the budget. In addition, the crux of the application was that the Defendants had failed adequately to reply to the RFIs (on more than one occasion, resulting in adverse costs).  It followed that the Defendant could not recover their costs of the applications relating to their failures to reply to the RFIs.

The Judge also refused the application for revision in respect of the additional disclosure documents as these were the Defendant’s own documents. The Defendant should have reasonably anticipated the extent of its own disclosure.

This case reaffirms that it is inconsistent with the overriding objective to allow parties to amend budgets because they have overlooked something or erred in estimations, or where the case develops in a way that should have been foreseen.

Budget that included overstated hourly rate was “improper”

MXX v United Lincolnshire NHS Trust [2019] EWHC 1624 (QB)

The Claimant’s solicitor overstated their hourly rates in their costs budget. Following the conclusion of the matter the Defendant applied for a sanction under CPR Part 44.11. In the SCCO the Costs Judge held that it was improper:

  • to include incurred costs in a budget comprising anything other than time multiplied by agreed rates; and
  • to claim more than a client was obliged to pay.

However, the Costs Judge did not accept that failures to revise the budget before or at the CCMC were further acts of improper conduct.

The Defendant appealed and six of nine grounds of appeal succeeded. The consequence is that the Master carrying out the detailed assessment will now decide whether the substantial overstatement of the hourly rate in the budget is a ‘good reason’ (within the meaning of CPR 3.18) for departing from the budget so as “to correct any injustice caused by [the] improper conduct”.

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A further affirmation of the “high bar” for “exceptional circumstances”

Hammond v SIG plc & Subsidiary Companies [2019] EWHC B7 (Costs)

The claim started in the portal and was subsequently resolved under Part 36. The SCCO found that the Claimant was entitled to fixed costs only despite arguing for an ‘escape’ from fixed costs under CPR 45.29J (i.e. “exceptional circumstances”).

The case is notable because the SCCO cited only one authority in which exceptional circumstances have been made out: “The only finding of exceptional circumstances produced by either party, notwithstanding the very substantial number of cases that are taken through the Portal each year, was … Jackson v Barfoot Farms, an unreported decision … and which is helpful if only as a contrast to the case before me. That particular case proved (as the Judge found) to be very complicated and settled for some £350,000. I would respectfully agree … that that case was indeed exceptional, but none of those considerations apply here”.

This case affirms what we already know: that the test of exceptionality is indeed a high bar.

High bar” for award of “exceptional circumstances” costs

Ferri v McGill [2019] EWHC 952 (QB)

The claim was initially run under the pre-action protocol for low value personal injury road traffic accidents. After settlement (pre-issue) the claimant sought more than fixed costs. The rules mandate fixed costs in Protocol cases, subject only to allocation to multi-track or exceptional circumstances (r. 45.29J). At first instance the Master allowed an escape from fixed costs by setting a ‘low bar’ for exceptionality, finding that circumstances took the case out of the general run of cases which the Portal was intended to cover.

The Defendant appealed, and the test of exceptionality was (re)affirmed as a high one, the Judge stating that “policy reasons … in fixed costs [cases] …, while allowing for ‘exceptional circumstances’ to depart from the regime, require a more strict, not a ‘low bar’, approach”.

The case has been sent back to be reassessed by another Master.

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Part 36 offer is valid

Calonne Construction Ltd v Dawnus Southern Ltd [2019] EWCA Civ 754

Two questions arose on appeal: (1) was a Part 36 offer invalidated by inclusion of a counterclaim yet to be pleaded?; and (2) did the inclusion of a term as to interest (8% per annum after expiration of the offer) render the Offer invalid?

The Court of Appeal found that it did not matter that the counterclaim had not been pleaded. The Court noted that the purpose of Part 20 is to enable counterclaims to be managed effectively and conveniently. Nothing exempts counterclaims from the provisions of Part 36. A proposed counterclaim is treated as a claim for the purposes of Part 36.

Part 36.7 provides that a Part 36 offer can be made at any time, including before the commencement of proceedings. Therefore, the offer could not be invalid because the counterclaim had not been pleaded.  To rule otherwise would mean that a defendant would have to go to the expense of pleading a counterclaim in order to make a Part 36 offer.

The inclusion of a term as to interest after the end of the Relevant Period did not invalidate the offer (although Part 36 offers will be treated as inclusive of interest until the Relevant Period expires).

Court can make costs orders in foreign currency

Cathay Pacific Airlines Ltd v Lufthansa Technik AG (2019) EWHC 715 (Ch)

The court has jurisdiction under s.51 of the Senior Courts Act 1981 and Part 44.2 to make a costs order in a foreign currency. There is no basis for reading into the court’s wide costs discretion a restriction that an award must be in sterling. The costs of a failed summary judgment application were assessed in the Defendant’s favour in the sum of €25,000.

Notice should be given, where summary assessment is sought in a foreign currency, together with a figure representing the sterling equivalent. There is no prescribed way to give this information – it may be by way of form N260 (statement of costs), written submissions and, if appropriate, by way of a witness statement.

Disapplication of QOCS for failure to pay trial fee

Bruce and Bruce-Daly v Thomas Cook Tour Operations (Unreported)

QOCS (Qualified One-way Costs Shifting) provides that a bona fide, losing claimant will not have to bear a defendant’s costs unless the defendant can satisfy one of the exceptions in the CPR.

In this case, the Claimants, relying on the Package Travel Regulations 1992, brought proceedings for breach of contract. In the course of the claim the Claimants’ solicitors ceased acting and, from that point onwards, the Claimants failed to comply with directions which resulted in the claim being struck out due to the Claimants’ failure to pay the trial fee. 

On the issue of costs, the Defendant submitted that QOCS should be disapplied on the basis that the Claimants’ conduct generally, including non-payment of the trial fee, had obstructed the just disposal of proceedings. The Judge considered that the Claimants’ conduct, in failing to comply with court orders coupled with the failure to pay the trial fee, was sufficient for the exception at CPR 44.15 to apply and the Judge disapplied QOCS and awarded the Defendant its full costs.